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Q2 2013 Earnings Call – Bonanza Creek Energy, Inc.

Bonanza Creek Energy, Inc. · Aug 9, 2013 · 33 slides

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Slides

  1. Q2 2013 Earnings Call – Bonanza Creek Energy, Inc. – slide 1
    Investor Presentation Expanding the Runway August 2013
  2. Q2 2013 Earnings Call – Bonanza Creek Energy, Inc. – slide 2
    Bonanza Creek Overview Wattenberg Field (Niobrara & Codell) Market Cap(1): 1.6 billion North Park Basin (Niobrara) Enterprise Value(1): 1.9 billion 31.9 MMBoe 1P(3) (3) 0.5 MMBoe 1P 59% Oil Public Float: 78% 100% Oil Rapidly…
  3. Q2 2013 Earnings Call – Bonanza Creek Energy, Inc. – slide 3
    Impressive Growth Track Record Proved Reserves(1) (MBoe) Production(1) (Boe/d) +62%(2) 60,000 16,000 +21% 14,000 50,000 12,000 40,000 10,000 30,000 8,000 6,000 20,000 4,000 10,000 2,000 0 - 2007 2008 2009 2010 2011…
  4. Q2 2013 Earnings Call – Bonanza Creek Energy, Inc. – slide 4
    Dramatic Year-Over-Year Increases 2Q13 compared to 2Q12 Corporate 55% Increase in Production (1) 13,492 Boe/d 46% Increase in Adjusted EBITDAX (2) 53.9 million 2Q13 compared to 2Q12 Rocky Mtns 105% Increase in Rocky Mtn…
  5. Q2 2013 Earnings Call – Bonanza Creek Energy, Inc. – slide 5
    Oil Weighted Reserves & Production Reserve Mix By Commodity (MMBoe)(1) Reserve Mix By Category (MMBoe)(1) Wet Gas GPM: 4.0 6.5 23.8 12% Crude Oil 45% Mid-Con Dry Gas PD 13.2 25% 30.2 PUD 57% Rockies Wet Gas Mid-Con NGLs 29.2…
  6. Q2 2013 Earnings Call – Bonanza Creek Energy, Inc. – slide 6
    Strong Organic Growth Inventory 350 MMBoe of resource potential(1) 9 primary opportunities in various stages of development and evaluation Wattenberg Wattenberg Niobrara B Arkansas Cotton Valley North Park Niobrara C Arkansas…
  7. Q2 2013 Earnings Call – Bonanza Creek Energy, Inc. – slide 7
    Wattenberg Niobrara a Premier Oil Resource Play Basin IRRs 80% 74% 73% 70% 66% 66% 60% 60% 57% 54% 51% 51% 49% 50% 40% 39% 40% 37% 35% 32% 32% 32% 29% 29% 28% 28% 30% 26% 26% 24% 24% 20% 10% 0% Futures Strip as of…
  8. Q2 2013 Earnings Call – Bonanza Creek Energy, Inc. – slide 8
    Doubling Activity in Wattenberg Field in 2013 Wattenberg Field 2013 Capex: 400 million Niobrara B (4,000): 56 wells Niobrara B (9,000): 2 wells Niobrara B (40-acre test): 6 wells Niobrara C: 4 wells Codell: 4 wells 80% 20% Other:…
  9. Q2 2013 Earnings Call – Bonanza Creek Energy, Inc. – slide 9
    Wattenberg Field Locator Map BCEI has operated in Wattenberg Field since 1999 Located in Extension Area 60% crude oil; liquids-rich natural gas Better economics than Gas Window Prospective for Codell and all benches of…
  10. Q2 2013 Earnings Call – Bonanza Creek Energy, Inc. – slide 10
    Wattenberg Niobrara & Codell Oil Focused Wells Ranch 40-acre and 80-acre pads testing Niobrara A, B, C and Codell Extended reach laterals Development & Testing Program LEGEND Niobrara B Bench at 80-acre spacing Vert…
  11. Q2 2013 Earnings Call – Bonanza Creek Energy, Inc. – slide 11
    BCEI Niobrara B Bench Well Performance 12
  12. Q2 2013 Earnings Call – Bonanza Creek Energy, Inc. – slide 12
    Wattenberg Expanding Resource Recovery Codell Codell prospective on 15,000 net acres Codell 1 % Oil Codell 2 % Oil IP30 370 81% 607 65% IP60 360 76% 467 63% IP90 335 73% - Niobrara C Bench Present on all Wattenberg acreage C…
  13. Q2 2013 Earnings Call – Bonanza Creek Energy, Inc. – slide 13
    Wattenberg Hz First Production Schedule 30 Non-Operated Gross Non-Operated Net Operated Gross Operated Net 25 Wells Completed 20 15 10 5 0 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 Actual Plan Catalyst Well…
  14. Q2 2013 Earnings Call – Bonanza Creek Energy, Inc. – slide 14
    Wattenberg Hz Niobrara B Target Type Well EUR 313,000 Boe; 62% crude oil(1) Initial 30-day Rate 458 Boe/d Cost per Well 4.2 MM NPV-10 at 80/BO 4.2 MM Payout 1.5 years ROR Sensitivity to Oil Price(2) (1) EUR based on internal…
  15. Q2 2013 Earnings Call – Bonanza Creek Energy, Inc. – slide 15
    Wattenberg 3P Reserves & Location Inventory 247 MMBoe Net 3P Reserves Proved Reserves 60% crude oil / 40% wet gas 32 MMBoe 32 MMBoe booked at YE2012 13 MMBoe PD 19 MMBoe PUD 107 MMBoe 108 MMBoe 215 MMBoe unbooked at YE2012…
  16. Q2 2013 Earnings Call – Bonanza Creek Energy, Inc. – slide 16
    Mid-Continent Operations (Arkansas) Provides free cash flow; reallocated to Wattenberg ERA SYSTEM SERIES GROUP FORMATION CENOZOIC EOCENE Claiborne PALEOCENE Wilcox Cotton Valley: 6,500 8,800 feet TERTIARY CRETACEOUS GULFIAN Midway…
  17. Q2 2013 Earnings Call – Bonanza Creek Energy, Inc. – slide 17
    Dorcheat-Macedonia Economics Type Well Economics 10-acre 5-acre EUR 148,000 Boe(1) 118,000 Boe % Oil & Liquids 65% 65% Cost per Well 1.8MM 1.8MM NPV-10 1.8MM 1.3MM Payout 1.6 years 1.8 years Risked Locations 120 gross(2) 219…
  18. Q2 2013 Earnings Call – Bonanza Creek Energy, Inc. – slide 18
    Cotton Valley Lenticular Oil Sands Pin-Point Fracture Technology Focused completion technology Improved recovery of OOIP Highly repeatable Dorcheat Unit 37 25-30 sand/shale sequences Each zone individually pressured Potential…
  19. Q2 2013 Earnings Call – Bonanza Creek Energy, Inc. – slide 19
    Financial Overview 20
  20. Q2 2013 Earnings Call – Bonanza Creek Energy, Inc. – slide 20
    Oil Weighted Production Result in High Margins Unit Cash Operating Costs (/Boe) Unit Revenue & Cash Margins (/Boe) 25 80 4.34 70 3.49 4.35 70.70 68.93 20 66.72 3.43 65.70 67.70 60 3.90 50 15 8.63 9.12 7.93 7.76 40 6.75 10…
  21. Q2 2013 Earnings Call – Bonanza Creek Energy, Inc. – slide 21
    Current Hedge Positions 7,300 Bbl/d hedged at a minimum price of 88.63/Bbl in 2013 6,800 Bbl/d hedged at a minimum price of 87.12/Bbl in 2014 (1) 1,500 Bbl/d hedged at a minimum price of 80.00/Bbl in 2015 (1) Less than 2% gas…
  22. Q2 2013 Earnings Call – Bonanza Creek Energy, Inc. – slide 22
    Financial Summary Simplicity & Transparency = Successful Outcomes Balanced approach to capital allocation Achieve best-in-class growth via an expanding Wattenberg development program Fund oily growth with oily cash flow and prudent…
  23. Q2 2013 Earnings Call – Bonanza Creek Energy, Inc. – slide 23
    Expanding the Runway Total Resource Potential of 350 MMBoe Maintain peer leading production growth rates Accelerate development with increasing activity levels Ability to fund acceleration while maintaining a strong balance…
  24. Q2 2013 Earnings Call – Bonanza Creek Energy, Inc. – slide 24
    Corporate Information Company Headquarters Investor Relations 410 17th Street, Suite 1400 James Masters Investor Relations Manager Denver, Colorado 80202 (720) 440-6121 (720) 440-6100 Main jmastersbonanzacrk.com (720) 305-0804…
  25. Q2 2013 Earnings Call – Bonanza Creek Energy, Inc. – slide 25
    Appendix 26
  26. Q2 2013 Earnings Call – Bonanza Creek Energy, Inc. – slide 26
    Wattenberg Horizontal Niobrara Economics(1) Target 313 MBoe Type Curve 600 30-day Avg: 458 boepd 550 60-day Avg: 400 boepd 90-day Avg: 355 boepd 500 450 400 350 Boe/d 300 250 200 150 100 50 0 0 12 24 36 48 60…
  27. Q2 2013 Earnings Call – Bonanza Creek Energy, Inc. – slide 27
    BCEI Acreage Correlation to Wells Ranch Niobrara A Bench Thinner and resistivity less developed A Niobrara B Bench Similar thickness and resistivity A Niobrara C Bench Slightly thinner lower chalk bench; similar resistivity…
  28. Q2 2013 Earnings Call – Bonanza Creek Energy, Inc. – slide 28
    Future Optimization 5280 Concepts to Test(1) Spacing Alternate 80 acre vs. 40 acre in Niobrara B & C Bench 5280 80 acre vs. 160 acre in Codell Stacked B & Codell Operational Efficiencies Drill all wells on one pad or one…
  29. Q2 2013 Earnings Call – Bonanza Creek Energy, Inc. – slide 29
    DJ Basin Midstream Infrastructure Capacity Crude Pipelines and Rail Projects Operator Origination Termination Hub Timing (Bbl/d) White Cliffs Pipeline SemGroup 70,000 Platteville, CO Cushing, OK Existing White Cliffs Expansion SemGroup…
  30. Q2 2013 Earnings Call – Bonanza Creek Energy, Inc. – slide 30
    Easing High Line Pressures in Wattenberg BCEI Considerations High line pressures caused by constrained gas processing capacity Legacy vertical wells impacted more than newer horizontal wells 86% of BCEI production comes from…
  31. Q2 2013 Earnings Call – Bonanza Creek Energy, Inc. – slide 31
    North Park Basin Niobrara(1) EUR 211,000 Boe Initial 30-day Rate 304 Boe/d % Oil 90% Cost per Well 5.1 MM NPV-10 at 80/BO 2.1 MM NPV-10 at 100/BO 3.9 MM 2014-2015 development opportunity EVALUATING No natural gas takeaway…
  32. Q2 2013 Earnings Call – Bonanza Creek Energy, Inc. – slide 32
    Dorcheat-Macedonia Type Curve(1) 140 120 Recompletions opening additional Cotton Valley oil pay zones up hole 100 80 Boe/d 60 40 20 0 0 12 24 36 48 60 Months 10-acre 5-acre (1) The type curve shows the…
  33. Q2 2013 Earnings Call – Bonanza Creek Energy, Inc. – slide 33
    Reconciliation to Adjusted EBITDAX We define adjusted EBITDAX as net income, plus (1) exploration expense, (2) depreciation, depletion and amortization expense, (3) stock-based compensation expense, (4) interest expense, (5) unrealized…

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